Alaska’s governor and Legislature ready for a legal fight over education funding

JUNEAU — Gov. Mike Dunleavy is preparing to challenge last year’s move by the Alaska Legislature to fund K-12 education in advance, but House and Senate lawmakers say they don’t intend to budge.

The debate will have major implications for public school funding in the fiscal year beginning July 1 and the ability of the Legislature to protect appropriations from veto.

“There’s always an opportunity, if the two branches of government don’t agree, they’ll go to the third branch to referee,” said Sen. Bert Stedman, R-Sitka and co-chairman of the Senate Finance Committee.

Last year, lawmakers approved House Bill 287, a piece of legislation that funded K-12 schools in fiscal year 2019 and fiscal year 2020, which starts July 1. Then-Gov. Bill Walker signed the bill into law.

In February, the governor proposed clawing back $20 million from the current year’s budget and reducing next year’s funding by about $321 million. On Thursday, the Alaska House definitively rejected that proposal and said it would stick with last year’s legislation. (The budget includes money for 2021 but leaves 2020 alone.)

“We’re holding firm with our belief that the appropriation made in last year’s budget still stands,” Speaker of the House Bryce Edgmon, I-Dillingham, said Thursday.

The Alaska Senate will do the same.

“We’re going to stand on that appropriation that we made,” Senate President Cathy Giessel, R-Anchorage, told reporters Friday morning.

Alaska’s new governor isn’t happy with that decision. In a letter sent to Giessel and Edgmon, Attorney General Kevin Clarkson wrote, “In the Department of Law’s opinion, the 2018 appropriation that ‘forward funded’ education ... is unconstitutional."

Because Dunleavy was elected in November, months after the passage of HB 287, he cannot use his veto unless lawmakers decide to change 2020 school funding. If lawmakers don’t open that box, the governor can’t do it on his own.

That makes last year’s legislation unconstitutional, Clarkson writes, because it cuts the governor out of the annual budget process, doesn’t allow him to use his line-item veto and violates the Constitution’s prohibition on dedicated funds.

If the decision stands, “That is a significant change in where we are in having a balance in Alaska government,” said Matt Shuckerow, the governor’s press secretary.

He asked a rhetorical question: What if the Legislature were to pass a similar bill, but for five or 10 years of education funding?

“We see this as a really important and major issue that the administration is not going to roll over on,” Shuckerow said.

The governor’s office is also raising a second issue: Last year’s legislation didn’t explicitly state how much money should go to education. The bill states only that “the amount necessary” to fund “the total amount ... of state aid calculated under the public school funding formula” in 2020 is appropriated.

“What we do see here is that based on the Department of Law’s interpretation, a transfer (of money) would not occur on July 1,” Shuckerow said.

Lawmakers are countering the attorney general’s argument with their own legal advice from Legislative Legal Services director Megan Wallace.

In an April 10 memo, she wrote that the appropriation is valid and, “unless the legislature amends or repeals those appropriations, or the governor challenges the validity of the above appropriations in court, the governor has a constitutional obligation to execute the appropriations ... when they take effect on July 1, 2019.”

House Minority Leader Lance Pruitt, R-Anchorage, said Thursday that he believes the disagreement is severe enough that it could cause the governor to veto the entire state operating budget.

Sen. Natasha von Imhof, R-Anchorage and co-chair of the Senate Finance Committee, said the Legislature does things similar to HB 287 “all the time.”

Even the governor has proposed a similar technique with his PFD payback plan, which calls for appropriations over three years. Shuckerow said the chief difference is that the PFD payback plan relies on money on hand in the Alaska Permanent Fund Corp. Von Imhof responded by saying the money can be considered “in hand” only if the administration ignores the fact that investment markets can go down as well as up.

Of the governor’s argument overall, she said, “Our response is essentially no response. We’ve already funded education. In our mind, it’s a done deal. It’s set aside. We have no intention of going back on our word, and if the governor wants to test that, he is free to do so."

About this Author

Juneau-based James Brooks covers state government, the Alaska Legislature and general assignments for the Daily News. He previously reported and edited for the Juneau Empire, Kodiak Daily Mirror and Fairbanks Daily News-Miner.